Thursday, February 16, 2012

You knew as soon as Microsoft bought Skype, they'd immediately put plans in motion to monetize it in a superior fashion.
Well the rollout has begun and it's been announced that Skype ads are coming to Canada. I'll admit I've become a big proponent of Skype. It's relatively bug free, with minimal crashing and, best of all, it's free. Unless you want to Skpe to several people at once, or use it to call a conventional landline, in which case it's still very affordable. Now we're going to have to pay the piper by viewing some banner and motion ads. We'll watch with a keen eye and hope the quality and creativity of the ads keeps the product at a superior level. Watching MSN messenger's message wall sometimes leaves me feeling like I've just come out of the Eaton Centre on Christmas eve, with so much messaging. But we'll keep an open eye.

Skype’s the limit for Microsoft Advertising, which is now selling advertising on the free version of the VoIP service it acquired last year for US$8.5 billion.

Microsoft began selling Skype advertising in the U.S. late last year, and rolled out the product in several global markets including Canada, Australia, France, Germany, Japan, Russia and the United Kingdom on Wednesday.

Owen Sagness, vice-president of advertising and online for Microsoft in Toronto, said that Microsoft has already seen “pretty good traction” for the Skype product among retail, consumer electronics and automotive advertisers in the U.S., and expects it be similarly alluring for Canadian advertisers.

Sagness called Skype “a very hot brand” that is “generally a safe environment for marketers to advertise in, and a very rich canvas for them to tell their brand story.”

Canadians are ardent Skype users, spending a total of 161 million hours on the service in January – a 78% increase over the 2011. The average time spent with Skype is 34.5 minutes, a 66% increase over January 2011.

“There’s a lot of engagement, and it’s engagement of a social nature,” said Sagnes. “Skype really allows advertisers to reach people that are highly engaged in a social setting, which is very powerful.”

Microsoft’s goal, said Sagness, is to ultimately get to one billion users a month. “When you start to talk about those types of reach and engagement numbers, it’s a very interesting proposition,” he said. “Advertising is the way we’ve chosen to monetize the free version of Skype.”

The ad units appear on the Skype home page, and include a 300 x 250–pixel unit and a 650 x 170–pixel unit that is expandable to 650 x 340 pixels to show ads that can include audio and video. Microsoft is also testing an “in-call” unit with clients including Walmart.

The product is currently being sold on a daily flat rate.

Sagness said that people 18-24 are 38% more likely to visit Skype than the general public, while adults 25-34 are 15% more likely. Users are also 24% more likely to come from a household with an annual income of more than $100,000. The product also skews slightly male, 53% versus 47%.

How will Canadians react to ads in this venue? Post your thoughts in our comment section.
Originally published by MarketingMag.ca on February 16, 2012